The Israel Antitrust Authority may intervene in the Eilat Port Company Ltd. privatization tender, and bar Israel Chemicals Ltd. (TASE: ICL), the sole participant in the tender.
Israel Chemicals was the only bidder in the tender to submit the guarantees for participating in the pricing for the Eilat Port. Consequently, the committee for the sale of the government share in the Eilat Port Company, chaired by acting Government Companies Authority director general Ron Friedman, decided to postpone the deadline for submitting bid to August 14. The tender committee has begun considering amending the tender's terms to persuade bidders who withdrew from the tender to reenter.
Sources inform ''Globes'' that the tender committee asked Antitrust Authority director general David Gilo for a pre-ruling if Israel Chemicals' operation of the Eilat Port would comply with antitrust regulations. The committee said that Israel Chemicals' participation in the tender raised serious policy issues, partly because of questions about cartelization.
The tender committee also asked members of the Committee on Concentration in the Economy for their opinions about possible effects to the interest of promoting competition and the prevention of concentration in critical transportation and ports infrastructures should Israel Chemicals win the Eilat Port tender.
A former participant in the tender told "Globes" today that if Israel Chemicals is disqualified, this would pave the way for the government to forego its minimum price of NIS 100 million for the Eilat Port. This was the demand that led to the withdrawal of the three participants that reached the pricing stage with Israel Chemicals. Israel Chemicals, which exports 2.6 million tons of products a year through the Eilat Port, was considered the only participant willing to pay the highest price for the port, in order to ensure that the port would not fall into the hands of a competitor.
Israel Chemicals was one of two participants for which a pre-ruling was requested from the Antitrust Authority at the start of the tender process. The other participant, Taavura Holdings Ltd. subsidiary Maman Cargo Terminals and Handling (TASE: MMAN), quit the tender before receiving a response, after Gilo raised problematic points about the company's participation.
Israel Chemicals refused to contact the Antitrust Authority, saying that it would only do so if it won the tender. This decision was partly because the tender authority does not have the legal authority to require the participants to receive a pre-ruling. In addition, a pre-ruling by the Antitrust Authority cannot be appealed, but a final ruling by it can be appealed to the Antitrust Tribunal.
Israel Chemicals' parent company Israel Corporation (TASE: ILCO) is controlled by Ofer Holdings Group, which is the largest shareholder in electric car venture Better Place Inc., and the imports of cars from the Far East is the Eilat Port's biggest source of revenue along with exports by Israel Chemicals. However, Better Place's electric cars will be assembled in Turkey.
Published by Globes [online], Israel business news - www.globes-online.com - on July 18, 2012
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